100 million used games traded annually in US
But Wedbush Morgan research says trade of second hand titles aids sales of new product
The number of second hand games trading annually in the US has reached an estimated 100 million units, accounting for one-third of games sold every year and bringing in revenue of USD 2 billion, according to an industry report published by Wedbush Morgan.
However, the research finds that as few as five per cent of new games sales are affected by the pre-owned market, and the trade in of old product could result in more new games being bought.
"The vast majority of used games are not traded in until the original new game purchaser has finished playing - more than two months after a new game is released - typically well beyond the window for a full retail priced new game sale," said analyst Michael Pachter.
According to Pachter, the commonly held perception that retailers such as GameStop are 'pushing' used games on customers prepared to buy new ones is largely untrue and that, on the contrary, used game sales are benefiting new games sales by providing currency to gamers with less disposable income to purchase additional games.
"If trade-ins occur at GameStop, they should position the trade-in customer to buy more new games than he/she would otherwise normally purchase. Because the average used game value is around 20 per cent of the new game price, we think that used game trade-ins fuel incremental sales of over six per cent of total new game sales, suggesting that the cannibalisation from the used game 'push' is more than offset by the benefit from used game currency," the report concluded.